The U.S. Government is "Too Big to Fail" and "Too Big to Save"! This is the fundamental cause of the gridlock in Washington when it comes to setting/changing fiscal policy. The lawmakers know that deficit spending cannot continue indefinitely but they also know that our economy will crater if they take actions to eliminate the deficit. When you have been "Cooking the Books" for 47 years and have a $99.8 Trillion GAAP basis "virtual debt" that you must now explain to the U.S. citizens and the planet, you are in an untenable situation.

This Ponzi scheme has given America a very enviable lifestyle for the last five decades, but it is all a fantasy that has been made possible by U.S. Government fraud and corruption. Now, by passing a new two year budget deal, the U.S. Government chooses to pretend like it can continue, they just raise the debt ceiling, continue to run with a $5.9 Trillion deficit, continue to pay themselves enormous salaries, continue to make the upper class rich, and continue to hornswoggle the Common Man by not keeping their promises to pay social benefits.

This Ponzi scheme fiscal policy of the U.S. Government has caused the U.S. Government to get MUCH TOO BIG! The U.S. Government is reporting a Cash Deficit of $0.433 Trillion when proper GAAP Accounting assesses a GAAP Deficit of $5.87 Trillion. The U.S. Government is spending much too much. The U.S. Government is committing to spend much, much too much. The U.S. Government is not taxing enough. The U.S. Government is reporting Debt of $18.7 Trillion when proper GAAP Accounting assesses the U.S. Government's public liabilities at US Unfunded Liabilities (GAAP) of $99.8 Trillion. The U.S. Government is spending too much because it has too many direct and indirect employees and is paying them much more than the U.S. taxpayers can afford. The U.S. Government is committing to spend too much by promising but not funding what are unaffordable social benefits.

The U.S. Government will have to be dramatically reformed and restructured to respond to the realities of proper accounting.

The U.S. and global economies are both being dramatically stimulated by the GAAP basis deficit spending of the U.S. Government. The U.S. and global economies are operating/surviving on the credit card of the U.S. Government for which the future U.S. taxpayers are ultimately responsible and the current U.S. taxpayers cannot even pay for the current level of spending. The U.S. Government has income of $3.278 Trillion in FY2016 and now has $99.8 Trillion on its credit card. This means that the U.S. Government has 30 times as much on its credit card as it has income and will put another $5.9 Trillion on its credit card in FY2016. It does not take a genius to recognize that this is absolutely absurd!

The U.S. Government and the Federal Reserve Bank took dramatic fiscal and monetary policy actions in response to the 2008 financial crisis to "save the financial system" and to "save the economy" but essentially all these actions did was dramatically increase the Cash basis deficit spending. Yes, these actions provided zero interest money to banks, provided for purchases of fixed income instruments by the Fed, and put U.S. Government guarantees behind the auto industry, the healthcare industry, and the financial institutions but this did not address the root cause of financial crisis that resulted from the bursting of the "Housing Bubble".

The root cause of the "Housing Bubble" financial crisis is the fact that the U.S. Government is operating with a Ponzi scheme fiscal policy (See The American Housing Bubble). This Ponzi scheme (USAPonzi) will have to implode or be purposefully dismantled before the U.S. Government can establish an equitable and sustainable fiscal policy. The U.S. Government has tried to take regulatory action to minimize the size of the "Too Big to Fail" banks and companies that were protected by these fiscal and monetary actions but the response to these government regulations has been largely to make the "Too Big to Fail" banks and companies even bigger.

Further, the actions to save the "Too Big to Fail" entities after the 2008 financial crisis have caused the U.S. Government to accelerate the rate at which the U.S. Government is assuming financial liabilities. Now the U.S. Government is "Too Big to Fail" because it is propping up the U.S. and global economy with fraud and corruption but the bottom line is the U.S. Government is "Too Big to Save" because it has $99.8 Trillionof Unfunded Liabilities! There is no rational way to deal with $99.8 Trillion of Unfunded Liabilities that are increasing exponentially.

We need for some adults in Washington D.C. to step up and address this gigantic problem.

We have a bunch of Scoundrels, Liars, and Cheaters in the U.S. Government that are responsible for this fraud and corruption and the upper class is no better because they are willing to go along with this fraud and corruption because it is appearing to make them filthy rich with counterfeit money (See Creating Counterfeit Wealth).

Solution

This situation can only be resolved by the U.S. Government adopting GAAP Accounting and committing to a balanced GAAP basis budget. This will ensure an equitable and sustainable fiscal policy.